Usability & Choice Overload in the Online Credit Card Marketplace

Every day, we are faced with a multitude of purchasing choices that range from small and insignificant, like selecting a brand of toothpaste, to incredibly consequential, like what kind of car to buy. More and more frequently, consumers look to the internet to make choices when shopping for a wide array of products, both large and small. When shopping online, access to many different options make our choices seem almost endless. But do all these choices actually improve our decision-making?Are we really able to find the best possible option when we have more choices?

Choice Overload and optimizing the choosing experience

If you have ever been presented with so many options, that you found it almost impossible to choose, you have experienced the phenomenon of choice overload. Research on choice overload, pioneered by Sheena Iyengar1,2, shows that while the perception of a lot of options is initially enticing to consumers, having too many choices is actually detrimental to decision-making. Iyengar’s work on choosing has important implications for a plethora of industries, but in the online marketplace, one notable industry is that of financial services, specifically, credit cards. An understanding of how the number of choices affects consumers’ decision-making can provide insight on how to best present the increasingly more numerous options for credit cards in order to drive conversion:

Choosing a credit card is an impactful decision. In order to create the best choosing experience and enhance customer satisfaction, providing a manageable number of options is key.

While it may seem advantageous to give customers as many options as possible so that they can find the credit card that best fits their needs, this strategy could actually be preventing them from submitting an application. So, how can a credit card company optimize the choosing experience and boost applications? Iyengar proposes four solutions for enhancing choosing, two of which are especially relevant when considering the presentation of credit card options online:

Cutting the number of choice options

Categorization

First, ask “Are all these card options really necessary? Does each option have something unique to offer?” One easy way to eliminate extraneous credit cards is to examine each card’s popularity—if a given card does not receive many applications, then it is probably not meeting consumer needs and can be removed. From here, you can further limit the number of decisions a potential customer is facing at a given time by grouping the different card options into manageable categories. Categorization shows customers that they have a large number of options to choose from, which is enticing and gives the perception of freedom, but groups these options into small, tractable categories so they do not feel overwhelmed.

By putting credit card options into categories (e.g., cash back, travel rewards, low interest), you allow the consumer to narrow the number of choices they face, based on the perks they are interested in. According to Iyengar, this makes choosing easier by reducing the number of factors a potential customer must consider at one time.

Winning at choosing – Capital One makes deciding effortless

OOne effective demonstration of categorization can be found on the Capital One website, which helps users narrow their options by first presenting them with five card categories, rather than showing all 12 credit card options at once. Limiting the number of choices reduces the effort needed from customers to make an initial selection. The categorization of a large number of credit cards makes consumers feel like they have more freedom without inundating them with too many options at once. Additionally, relevant labels and short descriptions of each category also provide the user with more information to inform their choice. Importantly, consumers also have the option to “Compare All Credit Cards,” which showcases all 12 card options, allowing them the freedom to control their decision journey.

Capital One takes the stress out of ‘Viewing All’

If the consumer decides to view all of Capital One’s card options at once, easy-to-access filters make narrowing the number of options effortless, which in turn mitigates the risk of the consumer becoming overwhelmed and delaying or abandoning their task. Images of each card add to the aesthetic appeal of the page by breaking up the text and fulfill another one of Iyengar’s requirements for improving choosing, concretization. The card image makes the choice feel more real because the consumer can associate the abstract features of the card with an actual item. In addition, bolded card descriptions and brief information about purchase rates, transfers, and annual fees make it easy to scan the details of each card. Consumers also have the ability to compare up to three cards, which helps to narrow selections in a manageable way. Taken together, these aspects of the Capital One site serve to improve the consumer’s choosing process by reducing the effort needed to make a choice. This, in turn, enhances the likelihood that they will see the process through to the point of purchase and apply for a Capital One credit card.

Where to start? – Chase’s card quiz helps customers choose

Another way credit card sites can help consumers choose is by narrowing down the number of choices based on the customer’s card needs or by card popularity. A card quiz, like the one on the Chase website, takes the effort out of choosing a credit card by suggesting the best card for the consumer, based on their responses to questions about what they are looking for in a credit card. The Chase site emphasizes that their card quiz takes only two steps, making it quick and easy to narrow down the card choices from 13 total options to just 1 or 2. The site also reduces the number of options that consumers are initially faced with by presenting their three best rated cards, giving them a good starting point without bombarding them with too much information. Again, consumers still have the ability to view all of Chase’s cards if they desire, preserving the feeling of choice freedom.

What to remember

In conclusion, when providing consumers with credit card options, remember the adage, “less is more,” as too many options are likely to drive potential customers away. Still, it is important to make it seem as though there are a lot of options to choose from, in order to attract consumers and make them feel as though they have freedom to choose. By segmenting many credit cards into fewer categories, consumers can more easily filter through their options and weigh their choices without feeling overwhelmed and abandoning their task. Because the nuances of credit cards can be complicated and the consequences can be great, the best way to satisfy customers is to make their choice seem effortless…and a satisfied customer is a repeat customer.

1Iyengar, Sheena S. & Lepper, Mark R. (2000). “When choice is demotivating: Can one desire too much of a good thing?” Journal of Personality and Social Psychology, 79(6), 995-1006.